Behring Case Ruling: Deliberation of the EB-5 Foreign Investor Program

According to the most current news, the EB-5 Regional Center program has ended last June 30th, 2021. After years of being renewed in this manner, it was disconnected from automatic renewals in the Congressional financial process. The United States Citizenship and Immigration Service (USCIS) filed an appeal against the ruling in the Behring Regional Center litigation, which involves the EB-5 investor immigration program in the United States. The United States District Court for the Northern District of California issued an injunction to overturn the EB-5 Modernization Rule and reinstate the former $500,000 investment criteria. The USCIS filed an appeal to restore the level to $ 900,000.

What Impact Will the Behring Court Decision Have?

            The Behring court ruling overturned a Department of Homeland Security regulation that increased the minimum investment amount necessary under the Regional Center EB-5 Program from $500,000 to $900,000. The ruling was based on the fact that the individual in charge of enforcing the regulation raising the minimum investment requirement was wrongly nominated, and hence the legislation was illegal. As a result, as long as the EB-5 Regional Center Program operates, the minimum investment required for an EB-5 petition to be approved is $500,000. Is this something that will be kept or changed?

Where do We Stand with the EB-5 Program?

            The EB-5 program is currently in a state of turmoil. The program’s Regional Center component has ended due to an automatic sunset provision that was in place until June 30th, 2021. For the past 20 years, Congress has annually renewed the program, ensuring that it never expires. However, the Regional Center initiative was decoupled from routine Congressional budget renewals this time and was thus put on hold until further notice. As a result, only the Direct Investment EB-5 Program remains in effect. The significance of this is that in the past, well over 90% of EB-5 investors preferred the Regional Center option, which was preferable because the investment equated to a five-year loan to a Regional Center project that was repayable at the time.

Is the Regional Center Program going to be resurrected?

            There is no clear response as to whether the Regional Center component of the EB5 scheme will be reintroduced. Congress must approve new legislation, and based on the House and Senate’s current schedules, this is expected to happen by the end of the year. Forging a consensus between the programs’ currently opposing Urban and Rural proponents will be a significant aspect. When it comes to when the minimum investment requirement might be raised, the most likely options are Congressional action in conjunction with the program’s renewal, or a properly introduced EB5 regulation with a 60-day comment period, both of which would result in a delay towards the end of this year.